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Dividends continued to have a great year in the third quarter. S&P Dow Jones Indices announced Wednesday that U.S. domestic-listed common stocks added $8.8 billion to net payments (increases less decreases) in July-September. The aggregate dollar distribution of $398 billion was a record and compared with $390 billion in the second quarter and $376 billion in the first quarter. Actual cash dividends climbed more than 19% year over year, and the forward indicated dividend payout reached a new all-time high of $31.94, up 14.5% from $27.90 at year-end 2011.

"At this point, we expect to see double-digit growth in actual dividend payments for the fourth quarter of 2012 and a potential double-digit gain in 2013depending on Washington," said Howard Silverblatt, the firm's senior index analyst. Current favorable tax treatment of dividends is set to expire on Dec. 31. From 2003 through 2012, investors will have saved $358 billion via qualified dividend tax cuts.

S&P Dow Jones counted 439 dividend enhancements (hikes, extras, and reinstated payouts) in the third quarter. That's a 25.4% gain over 350 at the same point in 2011. Out of the approximately 10,000 U.S.-traded issues, 53 companies cut or omitted their disbursements, versus 23 a year ago. Not to worry about that uptick, though; the cuts and omissions are minor and show no clear pattern.

Dividend yields decreased slightly at the end of the September quarter from the June quarter, to an average 2.7%, the result of a strong equity market, explains Silverblatt. "Yields remain relatively high when compared to competing income-producers such as bonds, treasuries or CDs."

Looking ahead, Silverblatt sees many positive signs for dividends, including earnings coverage and cash assets. "However, while companies are paying out record amounts, they are not being generous or even distributing near their historical payout rate," which averages 52% but currently is only 34%. "It's not a matter of companies being cheap. It's a matter of them being nervous about the economy and their resources, much like most of us."

IT WAS A RELATIVELY QUIET third quarter for the 65 stocks that comprise the Dow Jones Averages, but the dividend changes that did take place were all upbeat.

By Miller's calculations, the industrials as a group paid a combined $86.85 in July-September. That was 9.5% more than at the same time in 2011. Yield: 2.6%.

One last note on the industrials
UnitedHealth GroupUNH -0.941501380868692%UnitedHealth Group Inc.U.S.: NYSEUSD157.82
-1.5-0.941501380868692%
/Date(1481302468872-0600)/
Volume (Delayed 15m)
:
363161
P/E Ratio
23.415878877400296Market Cap
151643328746.211
Dividend Yield
1.5770333479471756% Rev. per Employee
904735More quote details and news »UNHinYour ValueYour ChangeShort position
(UNH) replaced
Kraft Foods
(KRFT) in the index on Sept. 24, prompted by Kraft's spinoff of its North American grocery business, which made it less representative of the U.S. large-cap market.